Published On: Tue, Aug 28th, 2018

Union Cabinet likely to approve 2% DA hike on Wednesday

New Delhi: The Union Cabinet is likely to consider on Wednesday a proposal to increase dearness allowance to 9 per cent from 7 per cent, which if cleared will potentially benefit over 30 lakh central government employees and 50 lakh pensioners including dependents.

Union Finance Minister Arun Jaitley

“The proposal to increase dearness allowance by 2 percentage points to 9 per cent is likely to be taken up by the Cabinet Committee on Economic Affairs (CCEA) on Wednesday,” a source said.

Earlier in march, the government had hiked DA by 2 per cent to 7 per cent of their basic pay with effect from January. DA is paid as proportion of the basic pay.

DA is a cost of living adjustment allowance paid to central government employees and pensioners. It is calculated as a percentage of an employee’s basic salary to mitigate the impact of inflation on the employees.

The proposed DA hike will take effect from July 1. As per the agreed formula, the DA rate increase is an average of 12-month consumer price index-industrial workers from July 1, 2017 to June 30, 2018.

TST

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